Fear Proves Unfounded

Cape Cod, Massachusetts

Cameron sat in his favorite seat for the meeting, facing the window looking out over the calm of Massachusetts Bay. It was an important meeting, after all.

Cameron's father had died long before, and his mother could use some additional money. She was 82 at the time, she didn't work, and, although she wasn't destitute, she did not have the cash to shop, give to charity, or spend on her grandchildren, all her favorite pastimes. She had plenty of equity in her last remaining asset – her one-bedroom condo – but like many Jewish mothers, she originally wanted to leave that to her children Cameron and Rick.

The answer was a reverse mortgage. And looking back on that meeting nine years ago sitting in his favorite chair in his mother's living room, Cameron knows it was the right answer.

“The reverse mortgage gave her great security just to have that money in the bank,” he says. “It gave her the security that she can stay in the place as long as she is well and doesn't have to move, the comfort to stay there, not to worry, to do what she wants to do at this stage in her life.”

That condo, in fact, had about $200,000 of equity, Cameron says. The family looked into a home equity loan, but they didn't want to saddle their mom with new monthly payments. They looked into selling the condo and setting up their mother in a rental, but she wanted to remain in her home – she loves the views most.

Back then, reverse mortgages were a novel idea. Cameron had read in a local newspaper about a gentleman named Joe DeMarkey with Bank of New York, who had recently started offering reverse mortgages. Cameron called him.

“What is this all about?” Cameron recalls asking DeMarkey.

DeMarkey first shared some background on reverse mortgages, before suggesting the meeting.

“He was just terrific,” Cameron says. “He explained it on the phone and then he came over and explained to me and my mother. I tend to ask a lot of question. It just seemed like, ‘this doesn't work -- is this a pyramid scheme?' But the government insurance was the key.

At one point during the meeting, Cameron's mother addressed the decision head on. As Cameron describes it, his mom was “afraid that they were going to come after her for hundreds of thousands of dollars.”

DeMarkey and Cameron tried to explain the concept of mortgage insurance to her.

“But they will come after me,” she said.

“They won't, Mom,” said Cameron. “Trust us.”

After some explaining, she understood. She also trusted them.

From there, they moved on to the documentation, and DeMarkey worked with them during the next two or three weeks to get everything in order. Once more before the loan closed, the family got together to go over the documents. They sat around the dining room table this time, the papers fanned out before them.

“My older brother, he is just like me, reading all the documents,” Cameron says. “We were looking for holes and we couldn't find any. We realized, this is too good and it is true.”

Soon enough, his mom received around $80,000.

What's interesting about Cameron's mother is that she's been a reverse mortgage consumer for so many years. She'll be 91 this November, and the money from the loan has yielded far more benefits than the family ever imagined.

“She loves shopping. She loves clothes. She gives more to charity. She is not waving it around; she spends it on her grandchildren,” Cameron says. “She has two great grandchildren now and she puts away money toward their education. [The reverse mortgage] is like a domino effect. Sixteen years from now, her great granddaughter will go to college, in part, on the reverse mortgage she got years before. It has an everlasting effect, as corny as that may sound.”

Actually, it sounds pretty good.